Wholesaling a property heading to foreclosure?

6 Replies

Is it ok to wholesale a property heading into a foreclosure? Will the debt still remain on the seller or to the buyer that’s receiving it on the other end of the deal?
Originally posted by @Javaris Lewis :
Is it ok to wholesale a property heading into a foreclosure? Will the debt still remain on the seller or to the buyer that’s receiving it on the other end of the deal?

The short answer is yes. "Headed to foreclosure" is not the same as being sold at the foreclosure auction and becoming a real estate owned ("REO") or bank owned property. Prior to a foreclosure, and assuming it's not a short sale, as long as you pay off the existing liens/debts including the mortgage the current property owner is the one in control. Once the sale happens, there is no need for a foreclosure and the debt is cleared. You can't do this if the house gets sold at the foreclosure auction. While sometimes the former owner can get the property back, it is usually a bank owned and controlled property at that point. Hope it helps!

@Marvin McTaw thanks it helps a lot! And it’s not a short sale. She’s trying to sell before she head into foreclosure.

Originally posted by @Javaris Lewis :

Marvin McTaw thanks it helps a lot! And it’s not a short sale. She’s trying to sell before she head into foreclosure.

 If it hasn't been sold at the foreclosure auction then you should generally still be good to go. You'll still want to make sure there aren't any issues and that title is clear so you'll want to send it to a standard title and lien search with your closing attorney. 

Be careful doing this because if you cant buy the property and the owners put off selling the house to someone else because you put it under contract then backed out; I hear you can be liable in court.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.